REPORT TITLE:
Managed Competition


DESCRIPTION:
Establishing the process for managed competition.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           2724
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO MANAGED COMPETITION.
 


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The purpose of this Act is to establish a
 
 2 process for managed competition to enhance government's ability
 
 3 to provide services it needs or is required to perform more
 
 4 efficiently and economically.  It is a response to both the
 
 5 Hawaii Supreme Court's decision in Konno v. County of Hawaii, 85
 
 6 Haw. 61 (1997), and the legislature's enactment of Act 230,
 
 7 Session Laws of Hawaii 1998.
 
 8      In Konno, the Hawaii Supreme Court invalidated a contract
 
 9 between the county of Hawaii and a private landfill developer and
 
10 operator after concluding that under the State's civil service
 
11 laws, only civil servants could perform the services and fill the
 
12 positions historically and customarily provided or filled by
 
13 civil servants.  Consequently, state and county agencies, in some
 
14 instances, were precluded from entering into service contracts
 
15 with private providers to obtain the services they needed, reduce
 
16 direct labor, material, and equipment costs, and take advantage
 
17 of indirect savings through contractual provisions for insurance
 
18 and indemnification against third-party and regulatory liability
 
19 claims.
 

 
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 1      Act 230, Session Laws of Hawaii 1998, established a
 
 2 committee to make government more efficient and cost-effective by
 
 3 authorizing state and county agencies to contract with the
 
 4 private sector for the provision of government services, and at
 
 5 the same time ensure that when government decides to seek
 
 6 services from the private sector, agencies rely on accurate
 
 7 assessments of government's financial condition, make informed
 
 8 and responsible cost comparisons, and make every effort to
 
 9 minimize the impact of their decisions on public employees.
 
10      The process for managed competition which is set out in
 
11 section 2 of this Act was developed by the committee for managed
 
12 competition that the legislature formed in section 6 of Act 230.
 
13 Except to preserve the exceptions from the civil service and
 
14 collective bargaining laws that the legislature has already
 
15 established, the process rejects categorical inclusions and
 
16 exclusions and opts instead for individualized evaluations of
 
17 whether government or the private sector can provide needed
 
18 services more efficiently and economically.  The process
 
19 recognizes that line-level agencies are most familiar with both
 
20 the nature of the services needed and what it takes to provide
 
21 them, and leaves it to them to determine whether public agencies
 
22 or contractors should provide needed services.  Contracts with
 
23 providers selected by agency determinations made pursuant to the
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1 process are valid as a matter of law and cannot be challenged as
 
 2 violative of the civil service or collective bargaining laws.  In
 
 3 addition, all provisions of all collective bargaining agreements
 
 4 entered into after the effective date of this Act by public
 
 5 employers and the exclusive collective bargaining representatives
 
 6 of public employees are required to be consistent with the
 
 7 process for managed competition established by this Act.
 
 8      Although this Act sets up a single process for managed
 
 9 competition that all state and county agencies must follow, it
 
10 specifies a decentralized scheme for implementing and supporting
 
11 the process' requirements.  The State and each of its counties
 
12 are authorized and responsible for establishing the support
 
13 structures for the process:  a system for identifying and
 
14 quantifying the costs associated with providing the services
 
15 government needs or is required to provide in-house, standards of
 
16 performance and other objective measures of accountability for
 
17 maintaining efficiencies and economies, mechanisms to encourage
 
18 management and employee collaboration, and employee training,
 
19 retraining, reassignments, reorganization, and benefit programs
 
20 and procedures.
 
21      The process neither requires nor prohibits public employee
 
22 layoffs.  It recognizes that efficiencies and economies may
 
23 require the release of public employees but leaves it to each
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1 jurisdiction to determine whether public employees will be laid
 
 2 off. 
 
 3      It is understood that structures and organization to support
 
 4 the process need to be developed and that it may be necessary to
 
 5 make technical revisions to procurement and other laws to assure
 
 6 that existing laws do not contradict or undermine the process or
 
 7 the provisions of this Act.
 
 8      Finally, the provisions of this Act are effective upon
 
 9 approval.  However, to avoid impairment of contract challenges
 
10 under the federal constitution, state and county agencies may use
 
11 the process for managed competition during the term of any
 
12 collective bargaining agreement in effect at the time the Act is
 
13 approved, only if the process' use is consistent with the
 
14 provisions of all applicable collective bargaining agreements.
 
15      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
16 a new chapter to be appropriately designated and to read as
 
17 follows:
 
18                             "CHAPTER
 
19                  PROCESS FOR MANAGED COMPETITION
 
20      "§  -1  Purpose.(a)  The purpose of this chapter is to
 
21 make government operations more efficient and economical by
 
22 establishing a managed competition process which in the first
 
23 instance encourages government agencies to maximize the
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1 efficiency and economy of their operations, but also permits them
 
 2 to acquire services from contractors without violating civil
 
 3 service and collective bargaining laws when additional economies
 
 4 and efficiencies can be achieved by contracting with the private
 
 5 sector.
 
 6      (b)  The process is premised on the assumption that
 
 7 efficiencies and economies are more likely to be realized when:
 
 8      (1)  Public agencies are permitted to choose between
 
 9           securing the services they need or are required to
 
10           perform from the public or private sector; and
 
11      (2)  The public and private sectors are given the
 
12           opportunity to compete against each other to provide or
 
13           deliver those services.
 
14 To achieve efficiencies and economies, agencies must be permitted
 
15 to determine on an individualized basis whether the services they
 
16 need are best performed in- or out-of-house.
 
17      (c)  The process for managed competition is intended to
 
18 further the following interests:
 
19      (1)  Agency self-assessment to improve efficiencies and
 
20           economies, and reduce the cost of government; 
 
21      (2)  Competition between public employees and the private
 
22           sector to secure the services government needs or is
 
23           required to provide or perform;
 

 
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 1      (3)  Reasoned decisionmaking; and
 
 2      (4)  Public-private partnerships.
 
 3      §  -2  Establishment of process for managed competition;
 
 4 exceptions.(a)  There is established a process for managed
 
 5 competition that state and county agencies shall use to obtain
 
 6 the services they need or are required to provide.  The process
 
 7 for managed competition shall consist of:
 
 8      (1)  Agency determination made at least annually with
 
 9           contributions from agency employees, to identify
 
10           whether services an agency needs or is required to
 
11           provide are performed more efficiently and economically
 
12           in-house by public employees or out-of-house by
 
13           contractors;
 
14      (2)  Agency formulation of objective performance
 
15           specifications and evaluation criteria for selecting a
 
16           service provider competitively; and
 
17      (3)  Selection of a service provider from among public
 
18           agency and private sector participants, utilizing the
 
19           specifications and criteria developed pursuant to
 
20           paragraph (2) and the procurement procedures of chapter
 
21           103D or 103F.
 
22      (b)  State and county agencies should be allowed to realize
 
23 the efficiencies and economies the process is designed to achieve
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1 and is critical in maximizing the effectiveness of the managed
 
 2 competition process.
 
 3      (1)  The directors of finance of the State and each of the
 
 4           counties shall:
 
 5           (A)  Establish a single, uniform system which all
 
 6                agencies within their respective jurisdictions
 
 7                shall use to identify, analyze, assign, and
 
 8                quantify relevant costs attendant to using public
 
 9                employees to perform the services an agency needs
 
10                or is required to provide;
 
11           (B)  Specify the amounts of those direct and indirect
 
12                costs common to all agencies within their
 
13                respective jurisdictions which the agencies shall
 
14                use to measure efficiencies and economies under
 
15                subsection (a)(1) and (3); and
 
16           (C)  Prescribe performance standards and quality
 
17                measures and procedures to monitor the
 
18                effectiveness of agency determinations to use
 
19                agency employees or private contractors to perform
 
20                the service an agency needs.
 
21      (2)  The State and each of the counties may use the layoff
 
22           provisions of the civil service laws and the respective
 
23           collective bargaining contracts to release employees
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           displaced from their positions by the process for
 
 2           managed competition.  Prior to implementing any layoff
 
 3           provision of the civil service laws or a collective
 
 4           bargaining contract, the State and each of the counties
 
 5           shall use their resources for placing, retraining, and
 
 6           providing voluntary severance incentives for displaced
 
 7           employees.  Resources that may be used to minimize or
 
 8           avoid the adverse effects of an agency's decision to
 
 9           secure needed services from contractors may include,
 
10           but are not limited to, coordination with the private
 
11           service provider awarded the contract under subsection
 
12           (a)(3) to continue a displaced employee's employment as
 
13           an employee of the contractor, reassignment to another
 
14           position the employee is qualified to fill, retraining
 
15           to qualify the employee for reassignment, and severance
 
16           incentives;
 
17      (3)  Agencies, employees, and exclusive collective
 
18           bargaining representatives may propose alternatives for
 
19           performing or providing services an agency needs or is
 
20           required to perform more efficiently and economically.
 
21           Proposals must be made in writing.  Agency and employee
 
22           proposals shall be submitted to all affected exclusive
 
23           collective bargaining representatives, and proposals
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           from exclusive collective bargaining representatives
 
 2           shall be submitted to all affected agencies.  Agencies,
 
 3           employees, and the employees' exclusive collective
 
 4           bargaining representatives shall be available to
 
 5           discuss proposals.  All discussions shall be completed
 
 6           in forty-five working days after receipt of a written
 
 7           proposal by the agency or the exclusive collective
 
 8           bargaining representative, unless the time limit is
 
 9           mutually extended.  Upon completion of these
 
10           discussions, alternatives proposed and discussed and
 
11           the costs associated with each shall be considered by
 
12           the agency in determining whether needed services will
 
13           be provided in- or out-of-house; and
 
14      (4)  On an on-going basis, agencies are encouraged to
 
15           regularly identify and monitor costs, establish
 
16           performance and quality standards to measure
 
17           efficiencies and economies, and make reasonable
 
18           efforts, including competitiveness collaboration and
 
19           training, job skills retraining, reorganizing the
 
20           workforce, and revising procedures, to enhance the
 
21           ability of employees to compete, enhance in-house
 
22           effectiveness and efficiency, and generally modernize
 
23           agency operations.
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1      (c)  The process for managed competition established by this
 
 2 section need not be used to obtain a service an agency needs or
 
 3 is required to provide, if a statute, county charter or
 
 4 ordinance, or administrative rule authorized the service to be
 
 5 performed or provided by non-civil servants including
 
 6 contractors, or by persons holding positions exempt from the
 
 7 civil service.
 
 8      §   -3  Managed competition determinations.(a)  Each state
 
 9 and county agency shall have exclusive and sole discretion to
 
10 determine whether a service it needs or is required to provide
 
11 will be performed by its employees, or obtained from other public
 
12 agencies or private contractors.  In making this determination,
 
13 the agency should consider:
 
14      (1)  The nature of the service the agency needs, including
 
15           whether the service is self-contained or part of a
 
16           larger service delivery system, geographically
 
17           dispersed, a core or ancillary government service, or
 
18           one for which in-house resources are available or
 
19           needed; and whether government control is necessary,
 
20           government accountability can be shared, or
 
21           government's authority will be diluted;
 
22      (2)  The potential for achieving cost savings, including the
 
23           need to abandon or repurchase capital improvements or
 

 
Page 11                                                    
                                     S.B. NO.           2724
                                                        
                                                        

 
 1           equipment that are not fully depreciated, the extent to
 
 2           which the service is available in the private sector
 
 3           marketplace, the extent to which federal or state
 
 4           restrictions may reduce interest in competing to
 
 5           provide or perform the needed or required service;
 
 6      (3)  Impact upon existing employees;
 
 7      (4)  The extent to which the services are needed or
 
 8           required, and whether the criteria to select a service
 
 9           provider competitively can be described in objective
 
10           specification; and
 
11      (5)  The risk of contract breaches, default, or cost
 
12           overruns; and complications attendant to transferring
 
13           and resuming operations at the start and end of a
 
14           contract.
 
15      (b)  Agency employees may develop and make recommendations
 
16 to improve the way they perform the services an agency needs or
 
17 is required to provide.  These recommendations shall be
 
18 considered by the agency in identifying and determining which
 
19 services are more efficiently and economically performed in- or
 
20 out-of-house under section    -2.  Agencies shall also utilize
 
21 the costs assigned by the director of finance of their respective
 
22 jurisdictions to make the determinations described in this
 
23 section and section    -2.  In addition, agencies shall use their
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1 resources for placing, retraining, and providing incentives for
 
 2 voluntary severance before any layoff provision of the civil
 
 3 service law or a collective bargaining contract is applied.  
 
 4      (c)  An agency's determination shall be final and no suit
 
 5 may be brought under any law, including but not limited to the
 
 6 laws relating to civil service, collective bargaining, public
 
 7 contracts, or procurement, to challenge an agency's determination
 
 8 once a determination is made."
 
 9      SECTION 3.  Chapter 89, Hawaii Revised Statutes, is amended
 
10 by adding a new section to be appropriately designated and to
 
11 read as follows:
 
12      "§89-    Managed competition consistency.  All provisions of
 
13 all collective bargaining agreements entered into pursuant to
 
14 this chapter shall be consistent with the process for managed
 
15 competition established in chapter    ."
 
16      SECTION 4.  Section 46-33, Hawaii Revised Statutes, is
 
17 amended to read as follows:
 
18      "§46-33  Exemption of certain county positions.  In any
 
19 county with a population of 500,000 or more, the civil service to
 
20 which this section refers is comprised of all positions in the
 
21 public service of such county, now existing or hereafter
 
22 established, and embraces all personal services performed for
 
23 such county, except the following:
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1      (1)  Positions of officers elected by public vote; positions
 
 2           of heads of departments; position of the clerk;
 
 3           position of the manager of the board of water supply
 
 4           and position of the chief of police[.];
 
 5      (2)  Positions in the office of mayor, but such positions,
 
 6           except those of the heads of the offices of information
 
 7           and complaint and budget director, shall be included in
 
 8           the position classification plan.  Employees of the
 
 9           municipal library and of the offices of information and
 
10           complaint and budget director, other than the heads of
 
11           such offices, however, shall not be exempted from civil
 
12           service[.];
 
13      (3)  Positions of deputies of the corporation counsel,
 
14           deputies of the prosecuting attorney, and law
 
15           clerks[.];
 
16      (4)  Positions of members of any board, commission, or
 
17           equivalent body[.];
 
18      (5)  Positions filled by inmates, patients, or students in
 
19           city institutions or in the schools[.];
 
20      (6)  Positions of district magistrates, jurors, and
 
21           witnesses[.];
 
22      (7)  Personal services obtained by contract where the
 
23           director of civil service has certified that the
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           service is special or unique, is essential to the
 
 2           public interest and that, because of circumstances
 
 3           surrounding its fulfillment, personnel to perform such
 
 4           service cannot be obtained through normal civil service
 
 5           recruitment procedures.  Any such contract may be for
 
 6           any period not exceeding one year[.];
 
 7      (8)  Personal services of a temporary nature needed in the
 
 8           public interest where the need for the same does not
 
 9           exceed ninety days, but before any person may be
 
10           employed to render such temporary service, the director
 
11           of civil service shall certify that the service is of a
 
12           temporary nature and that recruitment through normal
 
13           civil service recruitment procedures is not
 
14           practicable.  The employment of any person for service
 
15           of a temporary nature may be extended for good cause
 
16           for an additional period not to exceed ninety days upon
 
17           similar certification by the director subject to
 
18           approval of the civil service commission[.];
 
19      (9)  Personal services performed on a fee, contract, or
 
20           piecework basis by persons who may lawfully perform
 
21           their duties concurrently with their private business
 
22           or profession or other private employment, if any, and
 
23           whose duties require only a portion of their time,
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           where it is impracticable to ascertain or anticipate
 
 2           the portion of time devoted to the service of the city
 
 3           and such fact is certified to by the director of civil
 
 4           service[.];
 
 5     (10)  Positions of temporary election clerks in the office of
 
 6           the clerk employed during the election periods, but the
 
 7           positions filled by such employees shall be included in
 
 8           the position classification plan[.];
 
 9     (11)  Positions of one first deputy and private secretaries
 
10           to heads of departments and their first deputies, but
 
11           private secretarial positions shall be included in the
 
12           position classification plan.  The first deputy in the
 
13           department of civil service, however, shall not be
 
14           exempt from civil service[.];
 
15     (12)  Services provided pursuant to contracts for the
 
16           construction of capital improvement projects authorized
 
17           by the capital budget and program enactments of the
 
18           county legislative body; and
 
19     (13)  Services provided under a contract pursuant to a
 
20           managed competition process under chapter    .
 
21      The director of civil service shall determine the
 
22 applicability of this section to specific positions."
 
23      SECTION 5.  Section 76-16, Hawaii Revised Statutes, is
 

 
Page 16                                                    
                                     S.B. NO.           2724
                                                        
                                                        

 
 1 amended to read as follows:
 
 2      "§76-16  Civil service and exemptions.  The civil service to
 
 3 which this part applies shall comprise all positions in the State
 
 4 now existing or hereafter established and embrace all personal
 
 5 services performed for the State, except the following:
 
 6      (1)  Commissioned and enlisted personnel of the Hawaii
 
 7           national guard as such, and positions in the Hawaii
 
 8           national guard that are required by state or federal
 
 9           laws or regulations or orders of the national guard to
 
10           be filled from those commissioned or enlisted
 
11           personnel;
 
12      (2)  Positions filled by persons employed by contract where
 
13           the director of human resources development has
 
14           certified that the service is special or unique or is
 
15           essential to the public interest and that, because of
 
16           circumstances surrounding its fulfillment, personnel to
 
17           perform the service cannot be obtained through normal
 
18           civil service recruitment procedures.  Any such
 
19           contract may be for any period not exceeding one year;
 
20      (3)  Positions of a temporary nature needed in the public
 
21           interest where the need for the position does not
 
22           exceed one year, but before any person may be employed
 
23           to render the temporary service, the director shall
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           certify that the service is of a temporary nature and
 
 2           that recruitment through normal civil service
 
 3           recruitment procedures is not practicable;
 
 4      (4)  Positions filled by the legislature or by either house
 
 5           or any committee thereof;
 
 6      (5)  Employees in the office of the governor and household
 
 7           employees at Washington Place;
 
 8      (6)  Positions filled by popular vote;
 
 9      (7)  Department heads, officers, and members of any board,
 
10           commission, or other state agency whose appointments
 
11           are made by the governor or are required by law to be
 
12           confirmed by the senate;
 
13      (8)  Judges, referees, receivers, masters, jurors, notaries
 
14           public, land court examiners, court commissioners, and
 
15           attorneys appointed by a state court for a special
 
16           temporary service;
 
17      (9)  One bailiff for the chief justice of the supreme court
 
18           who shall have the powers and duties of a court officer
 
19           and bailiff under section 606-14; one secretary or
 
20           clerk for each justice of the supreme court, each judge
 
21           of the intermediate appellate court, and each judge of
 
22           the circuit court; one secretary for the judicial
 
23           council; one deputy administrative director of the
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           courts; three law clerks for the chief justice of the
 
 2           supreme court, two law clerks for each associate
 
 3           justice of the supreme court and each judge of the
 
 4           intermediate appellate court, one law clerk for each
 
 5           judge of the circuit court, two additional law clerks
 
 6           for the civil administrative judge of the circuit court
 
 7           of the first circuit, two additional law clerks for the
 
 8           criminal administrative judge of the circuit court of
 
 9           the first circuit, one additional law clerk for the
 
10           senior judge of the family court of the first circuit,
 
11           two additional law clerks for the civil motions judge
 
12           of the circuit court of the first circuit, two
 
13           additional law clerks for the criminal motions judge of
 
14           the circuit court of the first circuit, and two law
 
15           clerks for the administrative judge of the district
 
16           court of the first circuit; and one private secretary
 
17           for the administrative director of the courts, the
 
18           deputy administrative director of the courts, each
 
19           department head, each deputy or first assistant, and
 
20           each additional deputy, or assistant deputy, or
 
21           assistant defined in paragraph (16);
 
22     (10)  First deputy and deputy attorneys general, the
 
23           administrative services manager of the department of
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           the attorney general, one secretary for the
 
 2           administrative services manager, an administrator and
 
 3           any support staff for the criminal and juvenile justice
 
 4           resources coordination functions, and law clerks;
 
 5     (11)  Teachers, principals, vice-principals, district
 
 6           superintendents, chief deputy superintendents, other
 
 7           certificated personnel, and not more than twenty
 
 8           noncertificated administrative, professional, and
 
 9           technical personnel not engaged in instructional work
 
10           in the department of education, the special assistant
 
11           to the state librarian, one secretary for the special
 
12           assistant to the state librarian, and members of the
 
13           faculty of the University of Hawaii, including research
 
14           workers, extension agents, personnel engaged in
 
15           instructional work, and administrative, professional,
 
16           and technical personnel of the university;
 
17     (12)  Employees engaged in special, research, or
 
18           demonstration projects approved by the governor;
 
19     (13)  Positions filled by inmates, kokuas, patients of state
 
20           institutions, persons with severe physical or mental
 
21           handicaps participating in the work experience training
 
22           programs, and students and positions filled through
 
23           federally funded programs that provide temporary public
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           service employment such as the federal Comprehensive
 
 2           Employment and Training Act of 1973;
 
 3     (14)  A custodian or guide at Iolani Palace, the Royal
 
 4           Mausoleum, and Hulihee Palace;
 
 5     (15)  Positions filled by persons employed on a fee,
 
 6           contract, or piecework basis, who may lawfully perform
 
 7           their duties concurrently with their private business
 
 8           or profession or other private employment and whose
 
 9           duties require only a portion of their time, if it is
 
10           impracticable to ascertain or anticipate the portion of
 
11           time to be devoted to the service of the State;
 
12     (16)  Positions of first deputies or first assistants of each
 
13           department head appointed under or in the manner
 
14           provided in section 6, Article V, of the State
 
15           Constitution; three additional deputies or assistants
 
16           either in charge of the highways, harbors, and airports
 
17           divisions or other functions within the department of
 
18           transportation as may be assigned by the director of
 
19           transportation, with the approval of the governor; four
 
20           additional deputies in the department of health, each
 
21           in charge of one of the following:  behavioral health,
 
22           environmental health, hospitals, and health resources
 
23           administration, including other functions within the
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           department as may be assigned by the director of
 
 2           health, with the approval of the governor; an
 
 3           administrative assistant to the state librarian; and an
 
 4           administrative assistant to the superintendent of
 
 5           education;
 
 6     (17)  Positions specifically exempted from this part by any
 
 7           other law; provided that all of the positions defined
 
 8           by paragraph (9) shall be included in the position
 
 9           classification plan;
 
10     (18)  Positions in the state foster grandparent program and
 
11           positions for temporary employment of senior citizens
 
12           in occupations in which there is a severe personnel
 
13           shortage or in special projects;
 
14     (19)  Household employees at the official residence of the
 
15           president of the University of Hawaii;
 
16     (20)  Employees in the department of education engaged in the
 
17           supervision of students during lunch periods and in the
 
18           cleaning of classrooms after school hours on a less
 
19           than half-time basis;
 
20     (21)  Employees hired under the tenant hire program of the
 
21           housing and community development corporation of
 
22           Hawaii; provided that not more than twenty-six per cent
 
23           of the corporation's work force in any housing project
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           maintained or operated by the corporation shall be
 
 2           hired under the tenant hire program;
 
 3     (22)  Positions of the federally funded expanded food and
 
 4           nutrition program of the University of Hawaii that
 
 5           require the hiring of nutrition program assistants who
 
 6           live in the areas they serve;
 
 7     (23)  Positions filled by severely handicapped persons who
 
 8           are certified by the state vocational rehabilitation
 
 9           office that they are able to perform safely the duties
 
10           of the positions;
 
11     (24)  One public high school student to be selected by the
 
12           Hawaii state student council as a nonvoting member on
 
13           the board of education as authorized by the State
 
14           Constitution;
 
15     (25)  Sheriff, first deputy sheriff, and second deputy
 
16           sheriff; [and]
 
17     (26)  A gender and other fairness coordinator hired by the
 
18           judiciary[.];
 
19     (27)  Services provided pursuant to contracts for the
 
20           construction of capital improvement projects authorized
 
21           by the legislature; and
 
22     (28)  Services provided under a contract pursuant to a
 
23           managed competition process under chapter    .
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1      The director shall determine the applicability of this
 
 2 section to specific positions.
 
 3      Nothing in this section shall be deemed to affect the civil
 
 4 service status of any incumbent as it existed on July 1, 1955."
 
 5      SECTION 6.  Section 76-77, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "§76-77  Civil service and exemptions.  The civil service to
 
 8 which this part applies comprises all positions in the public
 
 9 service of each county, now existing or hereafter established,
 
10 and embraces all personal services performed for each county,
 
11 except the following:
 
12      (1)  Positions in the office of the mayor; provided that the
 
13           positions shall be included in the position
 
14           classification plan;
 
15      (2)  Positions of officers elected by public vote, positions
 
16           of heads of departments, and positions of one first
 
17           deputy or first assistant of heads of departments;
 
18      (3)  Positions of deputy county attorneys, deputy
 
19           corporation counsel, deputy prosecuting attorneys, and
 
20           law clerks;
 
21      (4)  Positions of members of any board, commission, or
 
22           agency;
 
23      (5)  Positions filled by students; positions filled through
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           federally funded programs which provide temporary
 
 2           public service employment such as the federal
 
 3           Comprehensive Employment and Training Act of 1973; and
 
 4           employees engaged in special research or demonstration
 
 5           projects approved by the mayor, for which projects
 
 6           federal funds are available;
 
 7      (6)  Positions of district judges, jurors, and witnesses;
 
 8      (7)  Positions filled by persons employed by contract where
 
 9           the personnel director has certified and where the
 
10           certification has received the approval of the
 
11           commission that the service is special or unique, is
 
12           essential to the public interest, and that because of
 
13           the circumstances surrounding its fulfillment,
 
14           personnel to perform the service cannot be recruited
 
15           through normal civil service procedures; provided that
 
16           no contract pursuant to this paragraph shall be for any
 
17           period exceeding one year;
 
18      (8)  Positions of a temporary nature needed in the public
 
19           interest where the need does not exceed ninety days;
 
20           provided that before any person may be employed to
 
21           render temporary service pursuant to this paragraph,
 
22           the director shall certify that the service is of a
 
23           temporary nature and that recruitment through normal
 

 
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                                     S.B. NO.           2724
                                                        
                                                        

 
 1           civil service recruitment procedures is not
 
 2           practicable; and provided further that the employment
 
 3           of any person pursuant to this paragraph may be
 
 4           extended for good cause for an additional period not to
 
 5           exceed ninety days upon similar certification by the
 
 6           director and approval of the commission;
 
 7      (9)  Positions of temporary election clerks in the office of
 
 8           the county clerk employed during election periods;
 
 9     (10)  Positions specifically exempted from this part by any
 
10           other state statutes;
 
11     (11)  Positions of one private secretary for each department
 
12           head; provided that the positions shall be included in
 
13           the position classification plan;
 
14     (12)  Positions filled by persons employed on a fee,
 
15           contract, or piecework basis who may lawfully perform
 
16           their duties concurrently with their private business
 
17           or profession or other private employment, if any, and
 
18           whose duties require only a portion of their time,
 
19           where it is impracticable to ascertain or anticipate
 
20           the portion of time devoted to the service of the
 
21           county and that fact is certified by the director;
 
22     (13)  Positions filled by persons with a severe disability
 
23           who are certified by the state vocational
 

 
Page 26                                                    
                                     S.B. NO.           2724
                                                        
                                                        

 
 1           rehabilitation office as able to safely perform the
 
 2           duties of the positions;
 
 3     (14)  Positions of the housing and community development
 
 4           office or department of each county; provided that this
 
 5           exemption shall not preclude each county from
 
 6           establishing these positions as civil service
 
 7           positions; [and]
 
 8     (15)  The following positions in the office of the
 
 9           prosecuting attorney:  private secretary to the
 
10           prosecuting attorney, secretary to the first deputy
 
11           prosecuting attorney, and administrative or executive
 
12           assistants to the prosecuting attorney; provided that
 
13           the positions shall be included in the position
 
14           classification plan[.];
 
15     (16)  Services provided pursuant to contracts for the
 
16           construction of capital improvement projects authorized
 
17           by the capital budget and program enactments of the
 
18           county legislative body; and
 
19     (17)  Services provided under a contract pursuant to a
 
20           managed competition process under chapter    .
 
21      The director shall determine the applicability of this
 
22 section to specific positions and shall determine whether or not
 
23 positions excluded by paragraphs (7) and (8) shall be included in
 

 
Page 27                                                    
                                     S.B. NO.           2724
                                                        
                                                        

 
 1 the position classification plan.
 
 2      Nothing in this section shall be deemed to affect the civil
 
 3 service status of any incumbent private secretary of a department
 
 4 head who held that position on May 7, 1977."
 
 5      SECTION 7.  The State and the several counties shall develop
 
 6 the cost system, performance and quality standards, and employee
 
 7 collaboration, competitiveness training, employee reassignment
 
 8 and retraining, incentive programs, and procedures necessary to
 
 9 support the process for managed competition established by this
 
10 Act.
 
11      SECTION 8.  Statutory material to be repealed is bracketed.
 
12 New statutory material is underscored.
 
13      SECTION 9.  This Act shall take effect upon approval,
 
14 provided that until all collective bargaining agreements in
 
15 effect when the governor approves this measure expire by their
 
16 own terms, state and county agency determinations made pursuant
 
17 to the chapter added to the Hawaii Revised Statutes by section 2
 
18 of this Act may be made only if they are consistent with the
 
19 provisions of all applicable collective bargaining agreements.
 
20 
 
21                       INTRODUCED BY:  ___________________________